A manufacturing company may conduct operations in a foundry, mill, or factory. Our interest is in the management of operations, or operations management (OM), including the usual management cycle of planning, implementing, and monitoring/controlling. The driving force for OM must be an overriding goal of continually improving service to customers, where customer means the next process as well as the final, external user.
Since there is an operation element in every function of the enterprise, all people in all jobs in every department of the organization should team up for improvement of there own operations management elements. What happens when suppliers and customer are disconnected? Consider design work, for example. Whether we speak of goods or services, time- and distance separation in the supplier-customer connection invites trouble.
In grocery stores, where the supplier-relationship is immediate, the operations manager system is hard pressed to maintain a customer focus. The customer is the next process, or where the work goes next. A buyer’s customer is the associate in the department to whom the purchased item goes; a cost accountant’s customer is the manager who uses the accounting operations-where the design will be produced or the service provided. It is also clear that throughout the organization, people not only have customers, they are customers. Let’s turn our attention to what customers want.
The requirement is a recipient’s or customer’s view of a good or service. A close partnership with the customer’s actual requirements. A close partnership with the customer helps create good specifications, increasing the supplier’s ability to fulfill the customer’s needs.
What else do customers want? Customers have six requirements of their providers: An organizational commitment with wide ranging effects, such as continuing improvement in meeting customer needs, is called a strategy. Strategy itself is necessary because of competition, and successful strategy ensures that company strengths match customer requirements.
To accomplish its aims, the business team must plan strategy in all four-line functions. A comprehensive strategic business plan deals with issues affecting the whole organization: employees, markets, location, line of products and services, customers, capital and financing, profitability, competition, public image and so forth.
OM strategies should be consistent with the business plan, but with a narrower focus: Capacity (operating resources): front-line and support people, information, equipment and tools, materials, location (space). Products, processes, methods, and systems: Strategies might include level of investment in product and process development, standardization, and manual versus automated information processes.